Could this low-tech Bitcoin scam cause the death of the virtual currency?

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Bitcoins! Everyone is talking about them, and only a handful of slightly weird “Ron Paul 2012” types are using them – but they could be the next big thing. The “cryptocurrency” has gained increasing attention in recent months as an intriguing alternative to traditional currencies – not relying on any government to prop it up. There is one problem though… as this Reddit user discovered.

The way Bitcoin works is rather complicated – but essentially, to send the virtual currency you need to use an app to generate a “private key”, which you can send to someone, who can then redeem your Bitcoins into their virtual wallet. It’s seen as secure, as all transactions are logged publicly (but anonymously), so everyone can see all is above board.

One of the easiest ways to transmit a long private key is using a QR code (“2D barcode”) – see they do have a use! Unfortunately, this is where the Reddit user who was trying to pay in a restaurant got caught out… here’s how he described the ordeal:

“So, the family and I were looking for a place to eat on Saturday night and we noticed the local steak house (we don’t normally go here because it’s really expensive and we’re currently on welfare (unemployed due to back pain issues)). We don’t have a lot of cash but I do have some savings in Bitcoin so we decided to eat here.”

“The steak house had a sign in the front window “Bitcoin accepted here”, so we walked in, were sat at a table, ordered our food (the wife and I treated ourselves to the more expensive items as a one time thing), then when it came time to pay up, all went wrong. I informed our waitress that I’ll be paying via Bitcoin and she said sure, just meet her up at the front till while she gets the manager to help with the transaction because she didn’t know how.”

“Anyway, the manager rings up the bill and converts it to BTC. He points to the QR code on the front of the register and says “send your payment to this wallet”. I did. We waited for the transaction to show on blockchain but it never did. We waited about a half hour and then I noticed something weird. I noticed on the QR code that there was another QR code underneath of it. I informed the manager and we both come to the realization that someone has put their own QR code over top his with double sided tape. FUCK.”

“So the manager tells me to repay to the correct QR code and I said no, this is your fault. We argued and eventually the police were called and they didn’t really know how to handle the situation. One of the officers even said “why didn’t you just pay with real money?” and I almost lost it. In the end we agreed that I’d pay half the bill and the manager would take a hit on the other half. What a fucked up night.”

It’s funny – for centuries the banks of the world have worked hard to make our money secure – adding endless security features to bank notes, and even choosing pictures of people with big beards, to make them harder to accurately replicate. Along comes Bitcoin with a seemingly perfect mechanism for secure payments and yet it is beaten… by a sticker.

So if you’re a Bitcoin trailblazer – watch out, lest you get caught out!